The Landsbanki Winding-Up Board is suing the top management of the bankrupt bank, board-members and insurers for damages caused by not stopping the bank’s operations on October 3 2008 when, according the the WUP, the bank was de facto bankrupt. In total, the WUB claims the damages amount to ISK45bn (€282m).
Those who are sued are CEOs Sigurjon Arnason and Halldor K Larusson, board-members Andri Sveinsson, Kjartan Gunnarsson, Svafa Gronfeldt and Thorgeir Baldursson, in total for £89m, in ISK, euros and dollars. In addition, 25 companies that insured the bank’s management are being sued by the WUP to pay together with these indivivuals, in total £91m. In addition, Jon Thorsteinn Oddleifsson, who was head of treasury, is sued for ISK11bn (€69m). Bjorgolfur Gudmundsson, the bank’s chairman, who, together with his son Bjorgolfur Thor, was the bank’s biggest shareholder, is not being sued. He is bankrupt and consequently unable to pay any damages.
The claims are based on money going out of the bank on its last day of operation October 6 2008, in total ISK35bn (now €219m). This money went onto the accounts of MP Bank, Straumur and Landsvaki, one of Landsbanki’s own money market funds. The dates are important because this means that according to the WUB the bank was already bankrupt when the British authorities closed down the bank.
The claims have beein presented to those who are being sued but have not yet been made public. It’s likely that the claims contain quite a bit of interesting information on the bank’s ownership. Father and son owned 41.5% in Landsbanki at the time it collapsed but the feeling is that they did in effect control a much larger part of the bank.
According to the SIC Report at least 12.5% of the bank’s shares were held in Landsbanki’s own offshore companies, controlled by the bank. The companies was apparently to hold employee option but were never used for that purpose. Other entities owned by the bank might have owned shares in the bank, in addition to shares owned by Straumur Investment bank, where father and son were the major shareholders and the son chairman of the board.
A group of small investors in Landsbanki, who are preparing to file a private suit against Bjorgolfur Thor, might find some interesting ammunition in the WUB claims.
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